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Mon, 19 Nov 2018 16:21:08 +0000en-UShourly1https://wordpress.org/?v=4.9.8How is compensation for copyright infringement determined in the Netherlands?https://www.amsadvocaten.com/blog/intellectual-property-law-in-the-netherlands/how-is-compensation-for-copyright-infringement-determined-in-the-netherlands/
Mon, 19 Nov 2018 09:06:49 +0000https://www.amsadvocaten.nl/?p=61324A dispute about copyright infringement goes beyond establishing that the copyrights of the copyright holder have been infringed. The next step is of course that the infringer must compensate the damage suffered on the part of the copyright holder. But how is such compensation assessed? Intellectual Property Rights Lawyer Manita Hamberg explains this subject by a recent judgement.

]]>A dispute about copyright infringement goes beyond establishing that the copyrights of the copyright holder have been infringed. The next step is of course that the infringer must compensate the damage suffered on the part of the copyright holder. But how is such compensation assessed? Intellectual property rights lawyer Manita Hamberg explains this subject by a recent judgement.

Legal relationship between disputing parties

Siemens is the developer of the software program ‘NX’, which is used for ‘3D modelling’. This NX Software consists of various modules that can be purchased separately. Siemens had commenced substantive proceedings against four parties that were jointly referred to as ‘ATG’. A commercial relationship already existed between Siemens and ATG, in which ATG purchased modules from the NX Software and had acquired the relevant licenses (= user rights). In 2013, they had discussed the licensing of one of the modules, namely the NX3 module. Eventually, ATG abandoned it.

Infringement of copyrights on NX Software established

Siemens had installed a security mechanism in the NX Software that signals the presence of illegal copies. Early 2017, Siemens received a notification from ATG’s corporate network that an illegal copy had been detected. Shortly afterwards, Siemens imposed a prejudgment garnishment on all infringing items and seizure of evidence against ATG. Illegal copies of versions 9 and 10 of the NX Software were found on the seized data carrier.

Infringing action acknowledged

ATG acknowledged the infringing action. It turned out that one of its employees had installed a hacked version of the NX Software package on their computer in 2015. ATG indicated that this employee was only interested in the NX3 module and had only used it for a total of 20 hours. As an employer, ATG has strict liability for damage caused by its employees to third parties.

Quarrel about level of compensation

ATG offered to pay in compensation once the license fee for the NX3 module and twice an annual maintenance fee and then to double this total amount. This amounted to approximately €54,000. However, Siemens claimed a license fee for the entire NX Software package, as the illegal copy provided access to all modules. According to Siemens, as two versions had been found, the compensation payable should amount to twice the license fee for the entire NX Software package, an amount of approximately €454,000. Also, there would be reputational damage and costs incurred in determining the damage.

Dutch guiding principle of actual damage

The Dutch court stated that, in general, the guiding principle of compensation law is compensation of the actual damage suffered or to be suffered. This is a specific calculation of the damage that entails a comparison between the situation as it actually is and as it would have been if the event giving rise to the damage had not occurred. If its extent cannot be accurately determined, it has to be estimated. As a specific calculation is often complicated in cases of copyright infringement, the court may also determine a fixed amount in damages. These are abstract damages.

Determination of compensation for copyright infringement

When determining damages in cases of copyright infringement, all the circumstances of the case should be taken into account, such as the loss of income incurred by the rightsholders, the unlawful profit made by the infringer, and the non-material damage caused by the infringer. Alternatively, the amount of compensation can also be derived from elements such as the amount of the royalties or fees that would have been due if the infringer had requested permission.

Compensation and reputational damage

In this case, the Dutch court deemed that the damages claimed by Siemens ignored the guiding principle of the loss estimate, namely that the actual damage should be compensated. Siemens was therefore awarded compensation of once the license fee and twice a maintenance fee for a total of approximately €30,000. There did not appear to be a causal link to be able to establish reputational damage. However, costs for determining the damage and payment of the costs of the action, including the attachment costs, were awarded, which ultimately amounted in total to the amount previously proposed by ATG to Siemens.

]]>Filing for bankruptcy to dismiss an employee free of charge: abuse of Dutch bankruptcy law?https://www.amsadvocaten.com/blog/insolvency-law/filing-for-bankruptcy-to-dismiss-an-employee-free-of-charge-abuse-of-dutch-bankruptcy-law/
Mon, 12 Nov 2018 09:58:20 +0000https://www.amsadvocaten.nl/?p=62275Employees enjoy dismissal protection under normal circumstances. They cannot simply be dismissed. Moreover, an employee who is not to blame for the dismissal is entitled to a transition payment. This protection is virtually absent in the event of the employer’s bankruptcy. This can lead to the abuse of bankruptcy law. Dutch Insolvency Law Lawyer Marco Guit explains.

]]>Employees enjoy dismissal protection under normal circumstances. They cannot simply be dismissed. Moreover, an employee who is not to blame for the dismissal is entitled to a transition payment. This protection is virtually absent in the event of the employer’s bankruptcy. This can lead to the abuse of bankruptcy law. Dutch insolvency law lawyer Marco Guit explains.

Termination of contract of employment by insolvency practitioner in the Netherlands

After a bankruptcy, an insolvency practitioner in the Netherlands may – and usually will – decide to terminate the employment contracts (with a short notice period). For this type of dismissal, the Employment Insurance Agency (UWV) does not require a severance payment, and there is no entitlement to a transition payment. The idea behind this in the Netherlands is that you cannot squeeze blood out of a stone, which means that employees are often left empty-handed.

Abuse of Dutch bankruptcy law

Under normal circumstances, the dismissal of (redundant) personnel is not easy in the Netherlands and often costly for the employer. Therefore, it is not surprising that some employers try to avoid the strict Dutch dismissal regulations by filing for bankruptcy. This is – justifiably – regarded as the abuse of bankruptcy law.

Indicators of the abuse of bankruptcy law

Abuse is usually assumed if the bankrupt orchestrated the inability to pay. There is also abuse if the following indicators – developed in case-law – occur:

the company files for bankruptcy;

the financial necessity – if any – arises (among other things) from a surplus of personnel;

filing for bankruptcy takes place shortly after dismissal permits or collective dismissals were refused or shortly after the withdrawal of requests for termination;

at the time of the declaration of bankruptcy, extensive restart plans were already in place;

the company’s business activities are continued in another legal entity or partnership by the directors or related legal entities, or there are other close links between the acquirer and the transferor;

the transferee wishes to take over the company albeit in a leaner form.

Director liable?

In a recent Court of Appeal ruling, an employee’s lawyer held an employer’s director liable for the abuse of bankruptcy law. In this case, the employer had applied for a dismissal permit for the employee, but this was refused. Subsequently, the employer negotiated with the employee about a company takeover. These negotiations broke down.

Filing for bankruptcy

The employer then filed for bankruptcy. A salient detail is that the main clients and the majority of the inventory of the employer were transferred to a new company (which was also managed by the director) before the bankruptcy.

Circumventing Dutch dismissal protection

According to the employee’s lawyer, there was a case of abuse because the employer only filed for bankruptcy to get rid of the employee and to be able to continue their business in the new company. The employer simply wanted to circumvent the dismissal regulations. The Court of Appeal agreed with this argument.

Bankruptcy Law Lawyer in the Netherlands

The Court of Appeal went through the above list and concluded that – more or less -all indicators were present. In particular, the fact that the employer’s business was already being continued in another company, but without the employee, was decisive. They were only trying to “get rid of” the employee. The director can be personally blamed for a serious instance of this action. In doing so, they acted unlawfully towards the employee and are liable for the damage suffered by him.

]]>Violation of the Dutch Beklamel criterion by directors of a bankrupt construction company?https://www.amsadvocaten.com/blog/corporate-law/violation-of-the-dutch-beklamel-criterion-by-directors-of-a-bankrupt-construction-company/
Mon, 05 Nov 2018 09:50:23 +0000https://www.amsadvocaten.nl/?p=62242A company is in principle liable for its own debts. This is an essential principle of Dutch company law. But that does not mean that directors can perform legal acts on their company’s behalf entirely risk-free. Certainly not if the company is in financial hard times. If a director concludes a contract on their company’s behalf, knowing that the company cannot (no longer) fulfil it, the director may be held liable for any ensuing losses. Dutch Corporate Law Lawyer Hidde Reitsma explains the Beklamel criterion.

]]>A company is in principle liable for its own debts. This is an essential principle of Dutch company law. But that does not mean that directors can perform legal acts on their company’s behalf entirely risk-free. Certainly not if the company is in financial hard times. If a director concludes a contract on their company’s behalf, knowing that the company cannot (no longer) fulfil it, the director may be held liable for any ensuing losses. Dutch corporate law lawyer Hidde Reitsma explains the Beklamel criterion.

Judgment in the Netherlands on directors’ and officers’ liability

The Arnhem-Leeuwarden Court of Appeal recently delivered an interesting judgement on directors’ and officers’ liability. The dispute concerned the question whether the directors of a bankrupt construction company could be held liable towards two duped creditors.

Dutch construction company to compensate losses

The creditors in question had concluded a building contract with the construction company concerning a roof. After completion of the works, a severe storm caused extensive damage to the roof construction. The construction company was held liable by the creditors but did not carry out any repairs. The construction company was ultimately ordered to pay € 30,000 in legal proceedings.

Bankruptcy on own petition

The construction company filed for bankruptcy. The insolvency practitioner stated in their first bankruptcy report that there had been a loss-making situation for some years. The trustee paid an amount of approximately € 1,000 to the creditors. The creditors then held the construction company’s directors liable. They argued that the directors knew or should have known that the construction company would not be able to meet its (financial) obligations towards the creditors. They referred to the fact that the construction company had considerably negative equity.

High threshold directors’ and officers’ liability in the Netherlands

The Court of Appeal stated first and foremost that in principle only a company itself is liable for non-fulfilment of its obligations. A high threshold applies to the liability of its directors. Directors may be held liable if a director has acted on the company’s behalf or has caused or permitted the company not to fulfil its legal or contractual obligations.

What is the Dutch Beklamel criterion?

More specifically, a director’s liability can be assumed if they, when taking on an obligation, knew or should reasonably have understood that the company would be unable to fulfil its obligations and not provide redress. This is called the Beklamel criterion.

Violation of the Beklamel criterion?

In this matter, the Dutch Court of Appeal considered the following. It was clear that the company had considerable negative equity at the time of concluding the contract and had incurred a loss in the year prior to the contract. The existence of negative equity and the suffering of losses does not mean that the point has been reached where it is irresponsible to continue the business and to enter into further commitments with third parties. However, this fact alone is not sufficient to conclude that the directors knew or should have known that the company would not be able to fulfil its obligations under the contract and could not provide any redress for the ensuing losses.

Dutch lawyer in cases concerning directors’ and officers’ liability

The Court of Appeal then stated that when assessing the moment at which the contract was concluded, attention must also be paid to, for example, the order book, market developments, credit facilities, and so on. These circumstances were not raised further by the creditors. Therefore, their claim against the director was rejected.

]]>Agreement on exit but not on share price? How about a flash exit?https://www.amsadvocaten.com/blog/corporate-law/agreement-on-exit-but-not-on-share-price-how-about-a-flash-exit/
Mon, 29 Oct 2018 10:23:23 +0000https://www.amsadvocaten.nl/?p=62240When the Flex BV was introduced in the Netherlands in 2012, it became possible to achieve a quick and straightforward buy-out of a shareholder by using the so-called ‘flash exit’. Even so, this option has not yet been used. Dutch Corporate Law Lawyer Onno Hennis explains the scheme and argues that its unpopularity is undeserved.

]]>When the Flex BV was introduced in the Netherlands in 2012, it became possible to achieve a quick and straightforward buy-out of a shareholder by using the so-called. Dutch corporate law lawyer Onno Hennis explains the scheme and argues that its unpopularity is undeserved.

Who determines a company’s value?

Under the new Dutch scheme, shareholders who have agreed on the buy-out of one of them can ask the court to set the price for the share
The portion of registered capital of a private or public limited company » Meer over shareshares to be transferred. In the Netherlands, the court can do this itself (for example if the articles of association
A document, drawn up when a Dutch company or legal person is set up, and which regulates the operations of the company and defines its purpose.» Meer over articles of associationArticles of Association or the shareholders’ agreement provide a clear calculation method) or appoint an expert to determine the company’s value (and the purchase price for the shares).

Flash exits not used in the Netherlands

To date, the scheme has not yet been used. This is probably because the parties – assisted by their lawyers – tend to arrive at similar solutions themselves. Shareholders typically wish to part ways because of a conflict between them. Usually, there is more to it than just the transfer of the shares. Sometimes a shareholder claims to have suffered a loss as a result of the actions of another shareholder or the board. In such cases, negotiations may also lead to the transfer of shares. However, as the parties themselves (or their lawyers) will draw up a settlement agreement, there is no need to go to court.

When is a Dutch flash exit appropriate?

In some cases, the relations between the shareholders may be much less overheated. The parties involved may have agreed to go their separate ways but have a difference of opinion about the price to be determined. In other cases, the parties may be unable to jointly appoint a third party who will determine the value of the company by way of a binding decision. In such cases, the Dutch flash exit may be a good option.

Benefits of flash exit in the Netherlands

There are some advantages to the Dutch flash exit. For example, the court will be able to determine the reference date for the valuation, the valuation method or basis, and other circumstances in a fair manner, if the parties disagree on this. Furthermore, speed is guaranteed because it is not open to appeal. Finally, if requested by the parties, the expert’s valuation could serve as a settlement agreement that binds the parties, except in very exceptional cases.

Joint application or no defence

A flash exit is only possible if the parties have agreed on the buy-out (but not on the price). The parties make a joint application to the court. This is particularly conceivable if shareholders jointly turn to a lawyer or civil-law notary with the request to help them with their “separation.” In that case, a good lawyer would also have to present the option of a flash exit to the parties. Another option is for each party to submit an application and a defence. This would require that the defendant states that he does not oppose the buyout.

Dutch lawyer in cases of shareholder’s exit

Are you a shareholder in a company where the parties agree on the exit of one of the shareholders, but the parties do not agree because they have a difference of opinion about the company’s value and therefore about the buy-out price? Our corporate law lawyers can assist you in the Netherlands.

]]>How does an emergency arbitrator under ICC Rules decide on a request for security?https://www.amsadvocaten.com/blog/dutch-procedural-law/how-does-an-emergency-arbitrator-under-icc-rules-decide-on-a-request-for-security/
Mon, 22 Oct 2018 08:40:16 +0000https://www.amsadvocaten.nl/?p=61326The Dutch Court in preliminary relief proceedings for lifting attachments put an end to four attachments worth more than 1 billion dollars, partly because 187.5 million dollars had already been deposited as a security as a result of summary arbitral proceedings. The court’s ruling gives some insight into how an emergency arbitrator under the ICC Rules interpreted his discretion. Procedural Law Lawyer Onno Hennis explains.

]]>The Dutch Court in preliminary relief proceedings for lifting attachments put an end to four attachments worth more than 1 billion dollars, partly because 187.5 million dollars had already been deposited as a security as a result of summary arbitral proceedings. The court’s ruling gives some insight into how an emergency arbitrator under the ICC Rules interpreted his discretion. Procedural Law Lawyer Onno Hennis explains.

Purchase agreement terminated

In 2014/2017, COFCO – a Chinese state-owned agricultural company – acquired the share
The portion of registered capital of a private or public limited company » Meer over shareshares of the Rotterdam grain trader Nidera. The total purchase price was 1.8 billion dollars. After the transaction, details about two transactions surfaced which would have caused considerable loss items for COFCO. COFCO wanted to cancel the transaction and terminated the purchase agreement. In addition, COFCO filed claims for damages against the sellers of Nidera.

ICC arbitration: Proceedings cut in two

As arbitration proceedings under the ICC Rules had been agreed in the contract of sale, COFCO initiated arbitration proceedings in 2017. A specific timetable had been determined in the arbitration proceedings, and the tribunal had split the proceedings in two. In the first phase, it would be examined whether there was a liability for the claims in relation to the transaction. In the second phase, the (level of the) damage would be discussed.

Summary before substantive arbitral proceedings

Prior to the substantive arbitral proceedings, COFCO demanded in summary arbitral proceedings (called ‘emergency arbitrator proceedings’ under the ICC Rules) that security should be provided to prevent it from being left empty-handed at the end of the day. The emergency arbitrator ultimately decided that an amount of USD 187.5 million should be deposited.

ICC Arbitrator Proceedings

Since 2012, it has been possible under the ICC Rules to request interim measures via arbitration in urgent cases. An emergency arbitrator will be appointed at short notice, who can take various measures in the form of an ‘order’ (i.e. not a judgment).

What kind of interim measures?

In principle, parties can request various types of interim measures. However, the measures will generally aim to guarantee a certain ‘status quo’, such as the prohibition on selling certain essential goods. Measures intended to prevent considerable (reputational) damage from occurring are also customary. In this case, COFCO had requested the emergency arbitrator to rule that COFCO would not have to pay the final instalment of the purchase price, namely 448 million dollars, pending the substantive proceedings.

Weighing of interests

As a rule, the emergency arbitrator will have to weigh up interests in his decision. In this case, he had to examine whether COFCO had sufficient grounds to be (temporarily) released from its payment obligation. Furthermore, he would have assessed whether there was a risk that the claims may be irrecoverable. On the other hand, the emergency arbitrator will have to weigh the interest of the sellers in the timely payment of the purchase price for the shares.

Emergency arbitrator’s calculation method

The emergency arbitrator took a practical approach. He considered that although COFCO only had a thin claim, its interests to be able to have recourse at the end of the day were more significant than the sellers’ interest to receive the purchase price (in time). He furthermore considered that the level of the expected damage was insufficiently precise. Apparently, on the occasion of the oral hearing, COFCO and the sellers had stated that deposits amounting to 300 million dollars or 75 million dollars, respectively, would be acceptable.

Emergency arbitrator took middle course

The emergency arbitrator, in the absence of other reference points, took the middle course and decided that the purchase price of 187.5 million dollars had to be deposited and the remainder had to be paid to the sellers.

Dutch lawyer in arbitration cases

If you are involved in arbitration (for example under the ICC Rules or through the Netherlands Arbitration Institute (NAI)) or wish to initiate arbitration proceedings, AMS Advocaten has extensive experience in conducting arbitrations, both nationally and internationally.

]]>General Terms and Conditions: The Brussels I Regulationhttps://www.amsadvocaten.com/blog/contract-law/general-terms-and-conditions-the-brussels-i-regulation/
Sat, 13 Oct 2018 07:39:47 +0000https://www.amsadvocaten.nl/?p=62279A Dutch wholesaler and a Polish company had become involved in a dispute. The wholesaler brought proceedings before the Rotterdam District Court. The Polish company believed that the Polish court had jurisdiction. After all, it had included a choice of forum for the Polish court in its general terms and conditions. Which court has jurisdiction? Dutch Contract Law Lawyer Gea Flapper, who deals extensively with contract law and general terms and conditions, explains by a recent judgement what you need to look out for when agreeing on a choice of forum clause.

]]>A Dutch wholesaler and a Polish company had become involved in a dispute. The wholesaler brought proceedings before the Rotterdam District Court. The Polish company believed that the Polish court had jurisdiction. After all, it had included a choice of forum for the Polish court in its general terms and conditions. Which court has jurisdiction? Dutch Contract Law Lawyer Gea Flapper, who deals extensively with contract law and general terms and conditions, explains by a recent judgement what you need to look out for when agreeing on a choice of forum clause.

What does the Brussels I Regulation do?

The Brussels I Regulation is a European regulation that regulates jurisdictional power in commercial matters between parties established or resident in the EU, in cases where a claim was filed after 10 January 2015. An exception to these regulations can be made if parties reach consensus on a choice of court clause.

Validity of choice of forum clause

It follows from Article 23 of the Brussels I Regulation that a choice of forum clause can only come about legally in one of the following ways:
1. by a written agreement (including electronic communication);
2. in a form that is customary in the conduct between the parties; or
3. in a form that is customary in international commercial practice.

Choice of forum and requirement that something be set out in writing

If the parties include a choice of court clause in the general terms and conditions, then the requirement that something be set out in writing is only met if the agreement signed by both parties explicitly refers to these general terms and conditions. This is not satisfied when an agreement refers in general to a quotation that in turn refers to the general terms and conditions (including the choice of forum). An agreement (or clause in general terms and conditions) to designate a competent court can only be adopted if the parties have reached an agreement on the designation of the competent court.

Dutch practical example of choice of forum clause

The Rotterdam wholesaler Commodity Line bought a large batch of chia seeds from the Polish company Katolik Group in 2017. This batch of chia seeds did not comply with the purchase agreement because the batch contained a too high percentage of the mycotoxin aflatoxin. The wholesaler then claimed compensation from the Polish company.

Does the Court of Rotterdam have jurisdiction?

It followed from Article 7(1) of the Brussels I Regulation that the Court of Rotterdam had jurisdiction to resolve this dispute. It follows from this Article that in respect of contractual obligations (e.g. a purchase contract), a person resident in another Member State may be summoned in the court where the obligation underlying the claim has been or must be honoured. For the purchase of movable property, the court of the Member State where the movable property is delivered has jurisdiction. The chia seeds were delivered in Rotterdam, so the Court of Rotterdam had jurisdiction.

Choice of forum clause in general terms and conditions

The wholesaler, therefore, started proceedings in the Court of Rotterdam. However, the Katolik Group’s lawyer raised a motion contesting jurisdiction and argued that the court should declare that it had no jurisdiction. According to the Polish company’s lawyer, the court had no jurisdiction because the company had included a choice of forum clause for the Polish court in its general terms and conditions. The choice of forum clause was:
“[…] Disputes which cannot be resolved amicably shall be settled by the competent court with jurisdiction at the registered seat of the Seller and by Polish law.”

Consensus and choice of forum

The court was obliged to examine whether the clause that declared the court to have (no) jurisdiction had been the subject of a consensus between the parties that had been clearly and accurately expressed. The parties’ actual consent is one of the objectives of that provision. Therefore, the court had to investigate whether Commodity Line and Katolik Group had reached such a consensus about the choice of forum.

Contract Law Lawyer in the Netherlands

The purchase agreement did not appear to refer to the Polish company’s general terms and conditions. Therefore, the text of these general terms and conditions did not apply to the contract and there was no consensus on the choice of forum. The choice of forum, therefore, did not apply. It means that the Court of Rotterdam had jurisdiction to judge on this dispute.

]]>Infringement of the trade name law with descriptive designation?https://www.amsadvocaten.com/blog/intellectual-property-law-in-the-netherlands/infringement-of-the-trade-name-law-with-descriptive-designation/
Mon, 08 Oct 2018 08:18:59 +0000https://www.amsadvocaten.nl/?p=61322In principle, a trade name that is already in use in social an economic life is protected against its use by another person. This protection not only applies to trade names with just a descriptive designation. Therefore, just the words ‘the butcher’ or ‘rent a car’ cannot be claimed for exclusive use as a trade name. They may be trade names, but there is a risk that other companies will also use the name. Intellectual Property Rights Lawyer Manita Hamberg explains.

]]>In principle, a trade name that is already in use in social an economic life is protected against its use by another person. This protection not only applies to trade names with just a descriptive designation. Therefore, just the words ‘the butcher’ or ‘rent a car’ cannot be claimed for exclusive use as a trade name. They may be trade names, but there is a risk that other companies will also use the name. Intellectual Property Rights Lawyer Manita Hamberg explains.

Older trade name enjoys protection in the Netherlands

According to Article 5 of the Trade Names Act, it is prohibited to use a trade name that is already in use by another party, or that differs very little from an older trade name if there is a risk of confusion on the part of the public.

No exclusive use of a descriptive designation

An exception to Article 5 applies to a trade name that consists solely of descriptive designations. It follows from the Supreme Court’s settled case law that anyone should be able to use a designation in their trade name that is descriptive of their products or services. Even if this creates a risk of confusion with other trade names.

Dutch trade name Brandwacht Huren versus Brandwacht Inhuren

In a recent case, the court faced the question of whether the trade name ‘Brandwacht Inhuren’ infringed the trade name rights of ‘Brandwacht Huren’. The defendant in the case had founded Brandwacht Inhuren after he had worked for Brandwacht Huren for many years. Both companies focus on the private market for hiring firefighters.

No infringement of Dutch trade name law

The court in preliminary relief proceedings found that the trade name ‘Brandwacht Huren’ was purely descriptive in character. After all, the designations ‘Firefighter’ and ‘hiring’ are descriptive of the service offered by Brandwacht Huren, namely the hiring of firefighters. This means that Brandwacht Huren cannot derive protection from its older trade name. There was, therefore, no question of a breach of Brandwacht Huren’s trade name rights by the defendant.

Unlawful act: Creating unnecessary confusion

However, the court believed that the defendant had acted unlawfully towards Brandwacht Huren. For example, the defendant had sent a WhatsApp message to firefighters in the network of Brandwacht Huren. Furthermore, as the owner of Brandwacht Inhuren, he had invited firefighters in Brandwacht Huren’s network to become his LinkedIn connections. Finally, the defendant answered telephone calls with either the name ‘Brandwacht Huren’ or ‘Brandwacht Inhuren’.

Dutch lawyer in cases of trade name infringement

According to the judge in preliminary relief proceedings, with these actions, the defendant deliberately had created confusion in order to lure customers away from the competitor in a misleading way. Therefore, he may no longer use the name ‘Brandwacht Inhuren’.

]]>Is it possible to be declared insolvent if payment obligations in bitcoins are not fulfilled?https://www.amsadvocaten.com/blog/insolvency-law/is-it-possible-to-be-declared-insolvent-if-payment-obligations-in-bitcoins-are-not-fulfilled/
Mon, 01 Oct 2018 08:39:42 +0000https://www.amsadvocaten.nl/?p=61320A company had been ordered in default to pay out ‘mining revenues’ totalling 0.591 bitcoin subject to a periodic penalty payment of €10,000. Because the company did not meet this obligation, the company’s creditor petitioned for its liquidation. Insolvency Law Lawyer Hein Hoogendoorn explains how the Amsterdam District Court came to its decision.

]]>A company had been ordered in default to pay out ‘mining revenues’ totalling 0.591 bitcoin subject to a periodic penalty payment of €10,000. Because the company did not meet this obligation, the company’s creditor petitioned for its liquidation. Insolvency Law Lawyer Hein Hoogendoorn explains how the Amsterdam District Court came to its decision.

When will a debtor be declared insolvent?

Article 1 of the Bankruptcy Act stipulates that a debtor, who is in the situation that he has ceased to pay, either on his own petition or on the petition of one or more of his creditors, can be declared insolvent by a court order. For the purposes of this article, a creditor means anyone who has a claim on the debtor, which, in the event of non-payment, will give rise to recourse against the estate and which arises from a legal relationship existing at the time of the liquidation order.

Liquidation in the Netherlands: Claims subject to validation

The point is, therefore, whether it concerns a claim that is subject to validation in the event of a liquidation order. Claims subject to validation are receivables which are dealt with by the insolvency practitioner and share
The portion of registered capital of a private or public limited company » Meer over shareshare in the proceeds of the liquidation of the asset.

Any penalties incurred are not shared

Article 611(e) of the Bankruptcy Act stipulates that penalties incurred cannot lead to recourse against the insolvent estate. Therefore, penalties incurred cannot be included in the proceeds of the liquidation of assets
The assets of a Dutch company reflect the value of all that the company possesses» Meer over assetsassets in the event of a liquidation. Therefore, according to the court, it is not possible to petition for a company’s liquidation on the basis of a penalty incurred.

What are bitcoins?

In this case, the creditor could in fact only petition for liquidation if a claim for payment in bitcoins were deemed to be subject to validation. To be able to answer this question, the court first had to investigate what bitcoins actually are. In the court’s understanding, a bitcoin consists of a unique, digitally encrypted series of numbers and letters that are stored on the hard drive of its owner’s computer. Bitcoins are ‘delivered’ by sending bitcoins from one wallet to another wallet. Bitcoins are therefore self-contained value files that are delivered directly to the payee by the payer in the event of payment.

Payment obligation in bitcoin, claim subject to validation?

According to the court, this means that a claim for payment in bitcoin can be regarded as a claim that is subject to validation. After it had drawn this conclusion, the court then arrived at the opinion that an obligation to pay in bitcoin should be regarded as a civil obligation to pay. The court then found that the debtor had failed to comply with this obligation. It therefore concluded that the petitioner for the liquidation had or at least summarily appeared to have a claim.

Plurality of creditors in liquidation orders

According to settled case law, the condition required for a liquidation order, i.e. having ceased to make payments, is fulfilled if the debtor has failed to pay two or more creditors. In this case, it had been established that the applicant had a claim for payment in bitcoin, but it had also been demonstrated that there were other creditors. For this reason, the court ruled that the necessary condition had been fulfilled and ordered the company’s liquidation, which was in fact on the basis of a payment obligation in bitcoin.

]]>Was the liquidation order of a dissolved British limited company justified?https://www.amsadvocaten.com/blog/insolvency-law/was-the-liquidation-order-of-a-dissolved-british-limited-company-justified/
Mon, 24 Sep 2018 08:26:18 +0000https://www.amsadvocaten.nl/?p=61318A British limited company, active in the Netherlands but incorporated under British law, had been deregistered from Companies House. A Dutch creditor then petitioned for the company’s liquidation in the Netherlands, which was granted. The board appealed. Was this liquidation order justified? Insolvency Law Lawyer Heleen Ceelen explains the case.

]]>A British limited company, active in the Netherlands but incorporated under British law, had been deregistered from Companies House. A Dutch creditor then petitioned for the company’s liquidation in the Netherlands, which was granted. The board appealed. Was this liquidation order justified? Insolvency Law Lawyer Heleen Ceelen explains the case.

Dutch entrepreneurs and British limited companies

In recent years, partly as a result of attractive conditions for incorporation, Dutch entrepreneurs have started setting up British limited companies. Although a Dutch Flex BV (under the Private Company Law (Simplification and Flexibilization) Act) has now become an attractive alternative, a legal entity under British law is no longer an exotic species among the various legal forms with which business activities can be developed in the Netherlands.

Appeal against a liquidation order

In a case recently reviewed by the Court of Appeal in The Hague, in an appeal against a liquidation order, the question arose whether the court could have justifiably ordered the liquidation of a taxi company established under British law. This company had already been deregistered from Companies House well before its liquidation as a result of a ‘compulsory strike-off’, which was a deregistration following non-compliance with obligations in the United Kingdom. The company had thus ceased to exist under British law, and no liquidation had been carried out.

Did the Dutch court have jurisdiction to order liquidation?

The Court of Appeal first of all ruled that a Dutch court had jurisdiction and that the question could be answered as to whether the court could order the liquidation on the basis of the European Insolvency Regulation under Dutch law. In a general sense, the Court of Appeal considered that under Dutch law, it is possible to order the liquidation of a dissolved legal entity that, in the opinion of its board, no longer has any income and has ceased to exist, at the request of a creditor who believes that there still is income.

Dutch Insolvency Law Lawyer in liquidation cases

The Court of Appeal concluded that this was no different for a company incorporated under British law that has its primary interests in the Netherlands. Even if this company had already been dissolved by a compulsory strike-off. And especially as there appeared to be several creditors, the company had ceased to pay, and income could not be excluded. Income could consist of a claim in respect of directors’ and officers’ liability and/or the fact that the share
The portion of registered capital of a private or public limited company » Meer over shareshares had not been fully paid up. The Court of Appeal, therefore, upheld the liquidation order.

]]>What about termination due to (a fundamental) breach of contract and the Vienna Sales Convention (CISG)?https://www.amsadvocaten.com/blog/contract-law/what-about-termination-due-to-a-fundamental-breach-of-contract-and-the-vienna-sales-convention-cisg/
Mon, 17 Sep 2018 08:55:09 +0000https://www.amsadvocaten.nl/?p=61314The Vienna Sales Convention applies to international purchase agreements concerning movable property not intended for personal use. A buyer can only enforce the replacement of defective goods on the grounds of this Convention or terminate the agreement in the event of a ‘fundamental’ breach of contract. Dutch contract Law Lawyer Lennard Noordzij explains how it works.

]]>The Vienna Sales Convention applies to international purchase agreements concerning movable property not intended for personal use. A buyer can only enforce the replacement of defective goods on the grounds of this Convention or terminate the agreement in the event of a ‘fundamental’ breach of contract. Dutch contract Law Lawyer Lennard Noordzij explains how it works.

International purchase agreement: Vienna Sales Convention

The Vienna Sales Convention (CISG) applies to international purchase agreements concerning movable property between professional parties (i.e. not consumers). The Netherlands and virtually all major trading partners such as Germany, the United States, China, France, and Japan – the United Kingdom is a notable exception – are party to the CISG. The CISG will apply if it has not been excluded by contract. The provisions of the CISG set aside the provisions of Dutch law.

Termination under Dutch law

Under Dutch law, an agreement may be terminated by dissolution. A party’s failure to comply with one of its obligations – if compliance is not possible at a later date or if the failing party refuses to comply – entitles the other party to terminate the contract unless the shortcoming is minor in nature. The consequence of termination is that all transactions made on the basis of the contract must be cancelled.

Termination under the Viennese Convention

The CISG is stricter in this. A contract can only be terminated in the event of a ‘fundamental’ breach of contract (and not just ‘any’ breach of contract). A fundamental breach of contract would lead to such damage to the other party that it is substantially denied what it could have expected from the contract. This is not the case if the party in default had not expected this effect and a reasonable person of the same capacity in the same circumstances would not have expected it either.

Contract terminated due to a fundamental breach of contract

In a case about a truck, the Arnhem Court of Appeal ruled that the buyer had rightly terminated the purchase contract. In this case, the seller had placed an advertisement prior to the sale, which stated that the truck was as good as new. Therefore, the buyer was entitled to assume that the seller was offering a reliable, well-functioning truck with low mileage. The Court of Appeal found that this was not the case on the basis of an expert’s report on the truck. The seller had to repay the purchase price to the buyer.

Why would a buyer exclude the Vienna Sales Convention?

A purchase agreement concerning movable property can be terminated less quickly under the CISG than under Dutch law. This may be a reason for a seller of movable property to declare the CISG applicable, or for a buyer to exclude the CISG.